More executive condominiums (ECs) are now selling for more than S$1 million.
Research from real estate agency Savills Singapore has shown that over 300 new ECs were transacted above S$1 million, with half of these transacted in the first eight months of 2012.
The report said there are a “seemingly growing number of young, affluent buyers snagging bigger and more luxurious penthouses…”.
Other factors like rock-bottom interest rates, rising incomes and many EC buyers escaping unscathed from the latest rounds of property curbs also helped prop up demand.
Savills said that with more resale HDB flats sold at higher prices, it also helped deepened the pockets of many HDB upgraders who now have more to spend on their next property.
The research pointed out that the average price of all new ECs reached a historical high of S$731 per square foot (psf) in the third quarter.
Still, the average price quantum for all new ECs was still below S$1 million, at S$822,000 in the second quarter of 2012.
There is also growing concern that EC buyers may be stretching beyond their affordability.
Based on a S$12,000 income limit, which is an income ceiling prerequisite for all EC buyers, a purchase of over S$1.1 million may begin to stretch wallets once interest rates rise above 3 per cent.
When this happens, monthly mortgage instalments are estimated to be between S$4,400 and S$5,000, amounting to possibly a cash top-up of S$2,100 to S$2,700.
Loan repayments of ECs priced below S$1 million would still be in the ‘safe zone’ should interest rates climb to 4 per cent.
In February this year, a new record was set for ECs when a new 958 sq ft EC at the Arc was sold at S$941 psf.
The trend follows more ECs being priced at over S$800 psf.
In the first three quarters of this year, the number jumped significantly to 215 units, up from 19 units in 2011 and 13 units in 2010.
Source : Channel NewsAsia – 22 Oct 2012